Objectives: To report the quarterly incidence of hospital-identified Clostridium difficile infection (HI-CDI) in Australia, and to estimate the burden ascribed to hospital-associated (HA) and community-associated (CA) infections. Design, setting and patients: Prospective surveillance of all cases of CDI diagnosed in hospital patients from 1 January 2011 to 31 December 2012 in 450 public hospitals in all Australian states and the Australian Capital Territory. All patients admitted to inpatient wards or units in acute public hospitals, including psychiatry, rehabilitation and aged care, were included, as well as those attending emergency departments and outpatient clinics. Main outcome measures: Incidence of HI-CDI (primary outcome); proportion and incidence of HA-CDI and CA-CDI (secondary outcomes). Results: The annual incidence of HI-CDI increased from 3.25/10 000 patient-days (PD) in 2011 to 4.03/10 000 PD in 2012. Poisson regression modelling demonstrated a 29% increase (95% CI, 25% to 34%) per quarter between April and December 2011, with a peak of 4.49/10 000 PD in the October-December quarter. The incidence plateaued in January-March 2012 and then declined by 8% (95% CI, - 11% to - 5%) per quarter to 3.76/10 000 PD in July-September 2012, after which the rate rose again by 11% (95% CI, 4% to 19%) per quarter to 4.09/10 000 PD in October-December 2012. Trends were similar for HA-CDI and CA-CDI. A subgroup analysis determined that 26% of cases were CA-CDI. Conclusions: A significant increase in both HA-CDI and CA-CDI identified through hospital surveillance occurred in Australia during 2011-2012. Studies are required to further characterise the epidemiology of CDI in Australia.